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Fairfax accepts insurance broker recommendation to shift base plan to $3,000 deductible to reduce city cost
Summary
The council approved moving its city base health plan to a $3,000 deductible with a health reimbursement arrangement, trimming the city's projected budget increase by roughly $9,100 while keeping employee out-of-pocket protections intact.
Fairfax — The City Council approved staff and broker recommendations to renew employee health coverage while changing the city’s base plan design to limit the budgetary impact for FY27.
Dean Zelli of Central Insure presented renewal figures for the city’s Walmart‑administered plan, saying the renewal showed an 11.9% premium increase on the existing plan. Zelli recommended moving the employer base plan from a $1,500 to a $3,000 deductible while keeping the city’s health reimbursement arrangement (HRA) in place to buy employees back down to familiar deductibles. "We ended up with an 11.9% rate increase," Zelli said during his review.
Under the recommended change, staff estimated the city’s health plan cost would rise from approximately $152,580 to $161,761 instead of to $170,750 — a budgetary reduction of roughly $9,000 compared with the straightforward renewal. Councilors were told employees would see no change to out‑of‑pocket protections because the HRA would continue to buy the lower effective deductibles for workers.
Why it matters: Health‑insurance costs are a recurring budget pressure for small cities; the approved structure seeks to preserve employee benefits while lowering the immediate budget hit to the city. Council approved the renewal with the recommended plan design by roll call.
Next steps: Staff will implement the renewal terms with the carrier and reflect the adjusted figures in the FY27 budget documents.
